I'm only now learning about stocks so please excuse any incorrect terminology.

Looking at a stock like Oracle, why would one invest in it given that it fluctuates very little?

I have an opportunity to buy some as part of an Employee Stock Purchase Program and due to my lack of knowledge in this field I wanted to understand.

  • 2
    Why would one invest in a stock that fluctuates very much? In general, fluctuations are risks, and risks are considered negatives.
    – MSalters
    Feb 22, 2017 at 20:19

4 Answers 4


Oracle specifically is paying a dividend with a current yield of about 1.4% annually and has appreciated nearly 50% over the last 5 years. Granted, the past doesn't guarantee the future but the company has paid a pretty steady dividend since 2009. If you're buying as part of an employee program you would presumably be holding the shares for a long time and the daily and even monthly movements aren't terribly relevant to a long term holding period.

Additionally, you may be able to buy the shares at a discount to the market price as part of your employee program. You probably also won't pay any transaction fee.


I don't think you are reading the stock chart right. ORCL has a beta of 1.12 which means it has more volatility than the market as a whole. See image below for a fairly wild stock chart for a year.

I would not truly consider ESPP participation investing, unless you intend to buy and hold the stock. If you intend to sell the stock soon after you are able, it is more speculation.

ESPP's are okay based upon the terms. If the stock was a constant price, and you could sell right away, then an ESPP plan would be easy money. Often, employees are often given a 15% discount to purchase the stock. If you can sell it before any price drop, then you are guaranteed to make 15% on the money invested minus any commissions.

Some employers make ESPP participants hold the stock for a year. This makes such a plan less of a value. The reasons are the stock can drop in price during that time, you could need the money, or (in the best case) your money is tied up longer making the ROI less.

The reasons people invest in stock are varied and is far to much to discuss in a single post. Some of your colleagues are using the ESPP solely to earn the discount in their money.

ORCL 1 year stock chart - Yahoo Finance


Apart from making money from the price difference, some stocks also give dividends, or bonus issues.

For long term investors whom are looking for steady income, they may be more interested with the dividend pay-out instead of the capital-appreciation.


What is your investment goal? Many investors buy for the long haul, not short-term gain. If you're looking for long-term gain then daily fluctuations should be of no concern to you. If you want to day-trade and time the market (buy low and sell high with a short holding period) then yes less volatile stock can be less profitable, but they also carry less risk. In that case, though, transaction fees have more of an impact, and you usually have to trade in larger quantities to reduce the impact of transaction fees.

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